Business Expansion: Term Definition

Subject: International Marketing
Pages: 2
Words: 381
Reading time:
2 min

Business expansion involves extending the operations of the business to other regions to exploit the existing market opportunities. I believe that it is necessary to consider the amount of cash available to the business to undertake the expansion costs as they are many. However, it is illogical and uneconomical to undertake the expansion exercise without enough cash or capital to cater for both the business risks and operations.

Before expanding the business both locally and internationally one has to consider the performance of the business in its current market. A well performing business will give a room to expand the business easily as it will have both the financial and managerial foundations necessary for extending its operations to other areas, considering that any business expansion requires large amount of cash flows and well trained manpower necessary to carry the business legacy forward. On the other hand, a non performing business would find it difficult and stressful to expand because it will require extra effort in terms of time, energy and cash flow to ensure that it picks up both in the old and the new markets.

Thirdly, before taking the business international there is need to learn the foreign culture and language of the countries the business is expanding. This assists in understanding the consumer tastes and preferences easily as well as gathers the necessary information for both brand quality and the entire business improvement. One needs to carry out an extensive research to understand the challenges and opportunities available to avoid blind decision making. More so, there is need to undertake a cost-benefit analysis of the new markets to know whether these markets will be profitable or not to avoid investing in countries where losses are undisputable.

In addition, one has to consider the necessary changes that ought to be undertaken on the product brands to fit the international market standards, however on might be surprised to find a well selling product locally performing poorly in the global market when the business fails to understand the market requirements. Therefore, the business should the major structural changes on both the company and the products that need to be initiated to meet the international standards to avoid unnecessary losses.